If the carbon stored in an afforestation or reforestation project is re-released, e.g. as a result of fire, the climate benefits of that project risk being reversed. This paper identifies the different physical risks to carbon stock reduction in forestry projects and options by which these physical risks, and associated economic risks, could be managed by project participants. This paper also examines eight different regimes that could be established to allocate credits generated by forestry CDM and JI projects. How these different crediting regimes are designed can determine whether credits generated by forestry projects represent real, measurable and long-term benefits and can also influence the economic impacts of premature carbon release from a project.